DSU 449, 450, 451, 452 & 454
Presented by: Mahru Enkhchimeg, Carrie Stratmoen, Micaela
Thurman & Rosanna Torres
DSU 449
DSU 451
US v. China
Antidumping
Measures
Mexico v.
China
Sept 2012
Oct 2012
(Carrie)
(Rosanna)
DSU 454
Japan v. China
Stainless
Steel
Textiles
Dec 2012
(Rosanna)
DSU 450
DSU 452
US v. China
Automobile
Industry
China v. EU
Renewable
Energy
Sept 2012
Nov 2012
(Micaela)
(Mahru)

GPX Int’l Tire Corp. v. United States (2008)

Final Decision from the US Court of
International Trade (December 2011)
 Countervailing duty law does not apply to non-market
economy (NME) countries
 Commerce Department's current method of applying
countervailing and anti-dumping duties on imports from
China and other "non-market economies" (NMEs) was
invalid.
New provisions added
Date of Enactment
Section 1 Countervailing
"Applicability to Proceedings
Involving Nonmarket Economy
Countries".
The law is
retroactive to 20
November 2006.
Section 2 Antidumping
"Adjustment to Antidumping Duty On or after 13
in Certain Proceedings Relating to March 2012.
Nonmarket Economy Countries".
Short Title:
US — Countervailing and Anti-Dumping Measures
(China)
Date of Consultation: September 17, 2012
Respondent:
United States
Third Parties:
Canada; European Union; Russia; Turkey; Japan;
India; Australia; Vietnam;
Complainant(s):
China;
Dispute Number:
DS449
Dispute Subject(s):
Anti-dumping Measures;
Dispute Status:
• Panel composed in March 2013
• Pending
PUBLIC LAW 112-99

Section 1- Countervailing
Measures
 A new piece of legislation (Public
Law 112-99) that explicitly allows
for the application of
countervailing measures to nonmarket economy countries
 Countervailing duty
determinations or actions made
or performed by US authorities
between 20 November 2006 and
13 March 2012 in respect of
Chinese products;
VIOLATE ARTICLES X:1, X:2, AND
X:3 OF GATT
Article X: Publication and
Administration of Trade Regulations
Articles X:1- Laws…shall be published
promptly in such a manner as to enable
governments and traders to become
acquainted with them.
Articles
X:2 - No measure of general
application… taken by any contracting
party shall be enforced before such
measure has been officially published.
Articles
X:3 Each contracting party shall
administer in a uniform, impartial and
reasonable manner all its laws…
PUBLIC LAW 112-99

Section 2- Anti-dumping
measures
 Anti-dumping measures associated
with the concerned countervailing
duty measures as well as the
combined effect of these antidumping measures and the parallel
countervailing duty measures;
 The United States' failure to provide
the US Department of Commerce
(USDOC) with legal authority to
identify and avoid the double
remedies in respect of investigations
or reviews initiated on or between 20
November 2006 and 13 March 2012.
VIOLATE ARTICLES X:3 OF
GATT

Articles X:3 Each contracting
party shall administer in a
uniform, impartial and
reasonable manner all its
laws…
DIFFERENCE IN EFFECTIVE DATES

US authorities have no basis
under domestic law to
identify and avoid double
remedies initiated between
20 November 2006 and 13
March 2012

US authorities did not
investigate and avoid double
remedies in the identified
investigations and reviews,
VIOLATE SCM, AD AND GATT
This omission prevents the US
authorities, in all such investigations
and reviews, from ensuring that
the imposition of countervailing
duties is inconsistent with (Articles
10, 15, 19, 21, and 32 of) the SCM
Agreement and (Article VI) of the
GATT 1994
that the imposition of antidumping duties in the associated
anti-dumping investigations and
reviews is inconsistent with (Articles
9 and 11 of) the AD Agreement and
(Article VI) of the GATT 1994.

Legal Issue
Domestic law become the object of dispute
settlement

Measurement Issues – avoid double remedy
ITC and DOC need to reach conclusive
determinations on any CV and AB
China-Certain Measures Affecting the Automobile and
Automobile-Parts Industries
USA Requested consultation in 09/17/ 2012
Respondent: Republic of China
Joined consultation: European Union in
09/28/2012 (DSU: Article 4.11)
 Current status: In consultation, panel not
formed



12



China provides subsidies in the form of
grants, loans, foregone government revenue,
the provision of goods and services, and
other incentives contingent upon export
performance to automobile and automobileparts enterprises in China.
China created 12 export base provinces.
USA listed 157 legal instruments including 83
as statement of evidence through which
China provides subsidies.
13





Article 3 of Subsidies and Countervailing
Measures (SCM)
Breach of transparency obligations
Article XVI:1 of the GATT 1994 and 25.1, 25.2,
25.3, and 25.4 of SCM
Accession Protocol-Part I, Paragraph 2C1 and
2C2
Accession Protocol-Part I, Paragraph 1.2.
14
U.S. & Chinese Subsidies
 U.S. provided GM and Chrysler $60 billion in
loans, working capital, and other support
funds in 2008
 Chinese automobile industry continued to
grow as a result of $586 billion stimulus
package; and sales tax cut on smaller cars
during the financial crisis 2008
15
16
17
18
19
20

http://www.youtube.com/watch?v=K4cbjLVr
KLM
21




US mainly imports auto-parts from China totaling $5.5
billion, while US exported one fifth of the amount
Hundred vehicle manufacturers in China of which 25 are
domestic producers (two thirds SOE)
Magna International Inc., Canada’s largest auto parts
maker, currently has 17 manufacturing and 6 sales,
engineering, and product development facilities in
China
Visteon has 25 manufacturing facilities and 3 customer
service centers in China.
22
PRC is Socialist country
Interventionist state, SOEs, state subsidies
State maneuvers the steering wheel
Chinese automobile and automobile parts industry is
premature (established 1950s, 1980s)
o DS 450 raises state sovereignty issues
o Multiple interest groups involved:
o
o
o
o
 General Motors
 Volkswagen
 Honda, etc.
o
Dispute resolution likely to impact U.S. and its largest
trading partner Canada’s interests in China
23
DISPUTE DS451
Production and Export
of Apparel and Textile
DISPUTE DS451
CHINA HAS MEASURES THAT SUPPORT
EXPORTERS AND PRODUCERS OF APPAREL
AND TEXTILE PRODUCTS
measures
Sale and Transport is provided to
CASH PAYMENTS
COTTON FARMERS
TAX EXEMPTIONS
reduction of IMPORT DUTIES
and VALUE ADDED TAX for
equipment
low cost loans by
STATE-OWNED banks
support for production
Discounted
ELECTRICITY
RATES
preferential land use
RIGHTS
DISPUTE DS451
2013
2012
Oct
Oct 15
Mexico
requests
consultations
Jan Feb Ma
r
Apr May Jun Jul Aug Sept Oct
Oct 25
European
Union
Oct 26
Australia &
Guatemala
Oct 29
Brazil, Peru &
U.S.
requests to join
consultations
request to join
consultations
request to join
consultations
Nov
Dec
Oct 30
Honduras
Nov 15
Colombia
requests to join requests to join
consultations consultations
DISPUTE DS451
IN CONSULTATION
Complainant requests consultations with respondent, no
dispute panel established and no withdrawal or mutually
agreed solution notified.
DISPUTE DS451
BUSINESS CONTEXT
SUBSIDIES are causing or threatening to cause serious
prejudice through displacement and impedance of Mexican exports
to the United States as well as through significant price
undercutting, price suppression, price depression, and
lost sales in the United States.
DISPUTE DS451
INVOLVE PROHIBITED ACTIONS
under SUBSIDIES & COUNTERVEILING MEASURES
AGREEMENT, GATT 1994, AGREEMENT on
AGRICULTURE & CHINA’S ACCESSION PROTOCOL
measures appear to
agreements & provisions violated
SCM AGREEMENT
Article 3.1 (a), (b)
Article 5 (c)
Article 6.3 (b), (c)
Article 6.4
Article 6.5
GATT 1994
Agreement on
AGRICULTURE
CHINA’S ACCESSION
PROTOCOL
Article III
Article 3
Article 9
Article 10
PART 1 - Paragraph 1.2
DISPUTE DS451
FORM PANEL: Consultations will probably not resolve the
situation given the MARKET COMPETITION of both countries.
PANEL REPORT must ask CHINA to REMOVE SUBSIDIES
and INTERNAL PREFERENTIAL TREATMENT FOR:
 producers/exporters of apparel & textile products
 suppliers in cotton & chemical fibers industries
WHAT: Domestic Content Requirements
Certain Measures Affecting the Renewable Energy
Generation Sector
DISPUTE DS452
2013
2012
Oct
Nov
Dec
Jan Feb Ma
r
Apr May Jun Jul Aug Sept Oct
Nov 5
China
requested
consultations
with the
European
Union, Greece
and Italy
Nov 16
Japan
request to join
consultations
Nov 19
Australia and
Argentina
request to join
consultations
NO ACTION
EU & China
negotiate
over solar
panels
DISPUTE DS452
IN CONSULTATION
Complainant requests consultations with respondent, no dispute
panel established and no withdrawal or mutually
solution notified.
agreed




China = EU's 2nd biggest trading
partner behind the United States
EU = China's biggest trading
partner
EU policy initiative 20% of Energy
from Renewables by 2020
August 6th EU due to impose
antidumping duties on Chinese
Solar Panels of 47.6% (Now 11%) –
China agreed to price floors
DISPUTE DS452

Articles I - General Most-Favored-Nation Treatment

Article III: National Treatment and Internal Taxation
 III:1 – No internal taxes, charges, laws, regulation or
requirements to imported or domestic products in order to
protect the domestic markets
 III:4 – No regulation affecting their internal sale
 III:5 – No internal quantitative regulation
DISPUTE DS452


Article 1.1 Subsidies = a financial contribution
by a government
3.1(b) Can not provide subsidies for using
domestic over imported goods
DISPUTE DS452

Article 2.1: No TRIMS inconsistent with article
III (National Treatment) or XI (General
Elimination of Quantitative Restrictions) of
GATT

Article 2.2: Illustrative List of TRIMS
Inconsistent w National Treatment:



China presents a typically vague case;
EU has many initiatives to spur renewable
energy, likely to have domestic incentives;
Similar DSU between the EU & Canada panel
found:
 Canada in violation of GATT and certain TRIM measures
 Rejected claims under SCM due to lack of evidence
DISPUTE DS454
Antidumping Duties
on High Performance Stainless
Steel Seamless Tubes
DISPUTE DS454
CHINA HAS MEASURES IMPOSING ANTIDUMPING DUTIES ON HIGH PERFORMANCE
STAINLESS STEEL TUBES
measures
INCREASING ANTI-DUMPING DUTIES
9.7%
11.1%
IMPOSED ON IMPORTS OF STEEL TUBES FROM THE EU
DISPUTE DS454
Jan 31 and Feb 1
Japan held
May 24
Dispute
Settlement Body
consultations with
China
establishes PANEL
2012
Dec
DISPUTE DS460
EU files similar case
June 13, 2013
Panel was formed
Sept 11, 2013
2013
Jan
Feb
Mar
Apr
May
Dec 20
Japan requests
Apr 11
Japan requests the
consultations
ESTABLISHMENT OF A
PANEL
Jun
Jul
Jul 17
Japan requested
Aug
Sept
Jul 29
DirectorGeneral
Director-General to
determine
composes PANEL
composition of
PANEL
Oct
DISPUTE DS454
PANEL COMPOSED
Panelists have been selected according to procedures laid
down in Dispute Settlement Understanding, Article 8. Panel
report has not been adopted or appealed. No
withdrawal or mutually agreed solution has been
notified.
DISPUTE DS454
BUSINESS CONTEXT
ANTIDUMPING DUTIES are significantly hampering
market access to China through price depression.
DISPUTE DS454
measures are INCONSISTENT WITH ANTI-DUMPING
AGREEMENT & GATT 1994
agreements & provisions involved
GATT 1994
ANTI-DUMPING AGREEMENT
Article VI
National Treatment
on Internal Taxation
and Regulation
Art.1 – Application of anti-dumping measures
Art.3 – Determination of injury
Art. 5 – Accuracy of evidence
Art. 6 – Confidentiality clause
Art. 7 – Provisional measures
Art. 12 – Notification
Annex II- Best Information
Article 1
Article 3.1
Article 3.2
Article 3.4
Article 3.5
Article 5.3
Article 5.8
Article 6.5
Article 6.5.1
Article 6.8
Article 6.9
Article 7.4
Article 12.2
Article 12.2.2
ANNEX II
DISPUTE DS454
PANEL REPORT must ask CHINA to REMOVE
INTERNAL PREFERENTIAL
TREATMENT
CHINA must commit to play by the
rules




WTO cases often have political & foreign
policy undertones
Domestic lawmakers have added
responsibility of domestic v. WTO laws
Nation states are developing “smart policy”
to work around WTO/GATT regulation to
appease domestic producers while also
advocating for more free trade
Trade disputes & DSU force countries to
engage on another level of diplomacy